________ are costs that have no obvious relationship to levels of output activity but are determined as part of the periodic planning process.
A) Capacity costs
B) Committed fixed costs
C) Discretionary fixed costs
D) None of the above

Question

Quizplus · Accepted Answer

Discretionary fixed costs are costs that are incurred at management's discretion and have no direct link to the production level. Examples of such costs include advertising, training, research and development, and employee benefits, and they are typically determined during the budgeting process. Capacity costs, on the other hand, are fixed costs that are associated with maintaining the production capacity of a firm, while committed fixed costs are fixed costs that are incurred from a contract or agreement that spans over a certain period of time, regardless of the level of output/activity.

________ Are Costs That Have No Obvious Relationship to Levels